CT REIT Announces Strong Third Quarter 2021 Results

• Delivers 6.5% growth in adjusted funds from operations per unit for the third quarter
• Announces nine new investments totalling $109.5 million

TORONTO, Nov. 8, 2021 /CNW/ – CT Real Estate Investment Trust (“CT REIT” or “the REIT”) (TSX: CRT.UN) today reported its consolidated financial results for the third quarter ending September 30, 2021.

“I am pleased with our strong third quarter results and our active acquisition and development program,” said Ken Silver, CEO, CT REIT. “We have successfully sourced attractive new investment opportunities that contribute to our key growth drivers and complement our existing quality portfolio of net lease assets. We also continue to add to our pipeline of Canadian Tire Corporation (CTC) developments. Our strategic relationship with CTC enables us to play a key role in meeting the real estate requirements of Canadian Tire’s store network, which is a critical element of CTC’s omni-channel strategy.”

New Investment Activity

Today, CT REIT announced nine new investments, which will require an estimated $109.5 million to complete. The investments are, in aggregate, expected to earn a weighted average cap rate of 6.31% when completed and represent approximately 449,000 square feet of incremental gross leasable area (GLA). CT REIT is funding these investments through the issuance of Class B LP Units and/or Class C LP Units to CTC, cash and/or draws on its credit facilities or any combination thereof.

Subsequent to the quarter, CT REIT completed the acquisition of a Walmart Supercentre anchored property from a third party in Halifax, Nova Scotia. In addition, CT REIT has entered into an agreement to acquire two Canadian Tire stores from a third party in Airdrie, Alberta and Beauport, Quebec. These new investments are anticipated to close in the fourth quarter and remain subject to customary closing conditions.

The table below summarizes the new investments and their anticipated completion dates:

Update on Investment and Development Activity

In the third quarter, CT REIT invested $14.2 million in previously disclosed investments, representing 75,000 square feet of incremental GLA.

As of September 30, 2021, CT REIT had 986,000 square feet of GLA under development, of which approximately 96% is subject to committed lease agreements. These developments represent an investment of approximately $300 million once completed.

Financial and Operational Summary

Financial Highlights

Net Income – Net income was $78.3 million for the quarter, an increase of 22.2%, compared to the same period in the prior year, primarily due to an increase in NOI* and an increase in the fair value adjustment on investment properties.

Net Operating Income (NOI)* – In the third quarter, NOI was $100.8 million, which was $5.7 million or 5.9% higher compared to the same period in the prior year. This was primarily due to rent escalations in CTC banner leases which contributed $1.6 million to NOI growth and the acquisition of income-producing properties completed in 2021 and 2020, which contributed a further $1.8 million to NOI growth. Same store NOI was $97.7 million and same property NOI was $97.8 million for the quarter, which were $3.3 million or 3.5% and $3.4 million or 3.6%, respectively, higher when compared to the prior year. This was primarily due to increased revenue derived from contractual rent escalations and lower provision on COVID-19 pandemic-related impacts.

Funds from Operations (FFO)* – FFO for the quarter was $72.5 million or $0.312 per unit – diluted (non-GAAP), which was 4.3% or $0.013 per unit – diluted (non-GAAP), higher than the same period in 2020, primarily due to the impact of NOI variances.

Adjusted Funds from Operations (AFFO)* – AFFO for the quarter was $64.9 million or $0.279 per unit – diluted (non-GAAP), 6.5% or $0.017 per unit – diluted (non-GAAP) higher than the same period in 2020, primarily due to the impact of NOI variances and the timing of professional fees.

Distributions – Distributions per unit in the quarter amounted to $0.210, 5.5% higher than the same period in 2020 due to the increases in the annual rates of distributions which became effective with the monthly distributions paid in September 2020 and July 2021.

*NOI, FFO and AFFO are non-GAAP measures. Refer to Non-GAAP section 11.0 “Non-GAAP Measures” in CT REIT’s Q3 2021 MD&A, which is available on SEDAR at www.sedar.com and at www.ctreit.com.

Operating Results

Leasing – CTC is CT REIT’s most significant tenant. As at September 30, 2021, CTC represented 92.4% of total GLA and 91.6% of annualized base minimum rent.

Occupancy – As at September 30, 2021, CT REIT’s portfolio occupancy rate, on a committed basis, was 99.3%.

Management’s Discussion and Analysis (MD&A) and Interim Condensed Consolidated Financial Statements (Unaudited) and Notes

Information in this press release is a select summary of results. This press release should be read in conjunction with CT REIT’s MD&A for the period ended September 30, 2021 (Q3 2021 MD&A) and Interim Condensed Consolidated Financial Statements (Unaudited) and Notes as at September 30, 2021, which are both available on SEDAR at www.sedar.com and at www.ctreit.com.

Note: Unless otherwise indicated, all figures in this press release are as at September 30, 2021 and are presented in Canadian dollars.

Forward-Looking Statements

This press release contains forward-looking statements and information that reflects management’s current expectations related to matters such as future financial performance, operating results and the effect of the COVID-19 pandemic (Pandemic) on CT REIT’s business and operations. Forward-looking statements are provided for the purposes of providing information about management’s current expectations and plans and allowing investors and others to get a better understanding of our future outlook, anticipated events or results and our operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

Certain statements other than statements of historical facts included in this document may constitute forward-looking information, including, but not limited to, statements concerning the REIT’s ability to complete the investments in the acquisitions under the headings “New Investment Activity”, the timing and terms of any such investment and/or agreements and the benefits expected to result from such investment and statements concerning developments, intensifications, results, performance, achievements, prospects or opportunities for CT REIT. Forward-looking information is based on reasonable assumptions, estimates, analyses, beliefs and opinions of management made in light of its experience and perception of prospects and opportunities, current conditions and expected trends, as well as other factors that management believes to be relevant and reasonable at the date such information is provided.

By its very nature, forward-looking information requires the use of estimates and assumptions and is subject to inherent risks and uncertainties. It is possible that the REIT’s assumptions, estimates, analyses, beliefs and opinions are not correct, and that the REIT’s expectations and plans will not be achieved. Although the forward-looking information contained in this press release is based on information, assumptions and beliefs which are reasonable in the opinion of management and complete, this information is necessarily subject to a number of factors that could cause actual results to differ materially from management’s expectations and plans as set forth in such forward-looking information. Without limiting the generality of the foregoing, given the circumstances surrounding the Pandemic, including the uncertainty of future waves, it is difficult to predict with certainty how significant the adverse impact of the Pandemic will be on, among others: the global and domestic economy, the general business environments and the operations and financial position, plans, and prospects of the REIT’s tenants, including CTC; the expected benefits from the investments described under the heading “New Investment Activity” and “Update on Investment and Development Activity”, including the timing of the acquisitions; and the business, operations, financial position, results, prospects or opportunities of CT REIT.

For more information on the risks, uncertainties and assumptions that could cause the REIT’s actual results to differ from current expectations, refer to section 4 “Risk Factors” of our Annual Information Form for fiscal 2020, and to section 12.0 “Enterprise Risk Management” and section 14.0 “Forward-Looking Information” of CT REIT’s MD&A for fiscal 2020 as well as the REIT’s other public filings available at www.sedar.com and at www.ctreit.com.

In addition, for further factors related to the Pandemic impacting the REIT, refer to section 2.0 “Factors Affecting the REIT as a Result of the Covid-19 Pandemic”, section 12.0, “Enterprise Risk Management” and section 14.0 “Forward-looking Information” of CT REIT’s MD&A for fiscal 2020, available at www.sedar.com and at www.ctreit.com.

The forward-looking statements and information contained herein are based on certain factors and assumptions as of the date hereof. CT REIT does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, except as is required by applicable securities laws.

Information contained in or otherwise accessible through the websites referenced in this press release does not form part of this press release and is not incorporated by reference into this press release.

Additional information about CT REIT has been filed electronically with various securities regulators in Canada through SEDAR and is available at www.sedar.com and at www.ctreit.com.

Conference Call

CT REIT will conduct a conference call to discuss information included in this news release and related matters at 9:00 a.m. ET on November 9, 2021.  The conference call will be available simultaneously and in its entirety to all interested investors and the news media by dialing 416-340-2217 (Participant passcode: 9066171#) or 1-800-898-3989 or through a webcast at https://www.ctreit.com/English/news-and-events/events-and-webcasts/default.aspx and will be available through replay for 12 months.

About CT Real Estate Investment Trust         

CT REIT is an unincorporated, closed-end real estate investment trust formed to own income-producing commercial properties primarily located in Canada. Its portfolio is comprised of over 350 properties totalling approximately 29 million square feet of GLA, consisting primarily of net lease single-tenant retail properties located across Canada. Canadian Tire Corporation, Limited is CT REIT’s most significant tenant. For more information, visit ctreit.com.

 

SOURCE CT Real Estate Investment Trust (CT REIT)

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